Cost Benefit Analysis

Disclaimer: The following information was developed in 1987 and updated where possible as recent as 2000. Please obtain current stats from your employee benefit consultant.

Cost
The cost of an Employee Assistance Program is often based on utilization. If 5% of employees used the program for an average duration of 7 visits at $120 each, the monthly cost would be $3.50 per employee.

Benefits
Competitive Advantage
The reduction of stress will enable your staff to be more courteous, creative, and able to concentrate longer. This will give you a significant advantage in today's competitive and rapidly changing market.

Absenteeism
15% of the work-force causes 90% of absenteeism. Emotional factors account for 61% of time lost through absenteeism. Statistics Canada reports that the typical employee is absent 8 days per year. Their studies also show that absenteeism costs the employer 1.75% of an absent employee's wages. Companies spend 5.6% of their payroll on absenteeism.

Productivity
The Canadian Mental Health Association estimates that 10% to 15% of employees have severe personal problems. The work performance of these employees is at least 35% below normal. The reduced productivity of troubled employees costs companies 3.5% to 5% of payroll.

An employee with problems disrupts the working environment of others. The effects of one employee's problems on the productivity of co-workers are considerable, but difficult to measure.

Turnover
Only 15% of terminations are the result of employees' inability to perform their job function. Personal and interpersonal factors account for 65% to 80% of all terminations. The EAP helps employees resolve personal and interpersonal problems before termination is necessary.

Disability
Stress contributes to 85% of accidents. An EAP will reduce the stress of your workforce This will reduce the claims and rates of your extended health care and short term disability plans. Your long term disability rates should also be reduced as a result of the lower risk of your employees.

Others
Personal problems contribute significantly to tardiness, theft, arson and fraud. Stress adversely effects physical health and quality of life.

Analysis
If 5% of your employees used the EAP the potential monetary savings would be 3.45% of payroll for reduced absenteeism and improved productivity from problem employees. The savings from these areas alone justify the cost of 0.14% of payroll.